Various sales promotion mechanisms exist including prizes, contests, sweepstakes, games, free samples, product warranties, tie-in promotions, loyalty points, cross-sell, up-sell, premium, memberships, card discounts and gift certificates. These mechanisms have been used for a long time to retain loyal customers, to increase the repurchase rate of occasional customers, to attract new buyers, to manage inventory and to gain market. Such mechanisms and others (e.g., instant discount, which is similar to haggling or negotiations in the real world) are referred to hereinafter as coupons.
In particular, coupons have been used as a sales promotion tool in the physical shopping world. A shopper usually has several coupons that can be used for a given purchase and needs to decide the subset of coupons to be redeemed for the purchase. Several factors make this decision a nontrivial task for the shopper. Often, coupons have mutual exclusivity constraints that restrict their use with other coupons. For example, the constraint may be that a coupon cannot be applied with any other discounts on a particular item.
With the advent of Internet shopping, the electronic equivalents of “coupons” have come into existence. There are three types of models: (1) coupons that are issued at an e-commerce site and redeemed at a physical store, (2) those issued and redeemed at a single e-commerce site, and (3) others that are issued at one e-commerce site and redeemed at another e-commerce site. The most general electronic coupon generation, presentation, redemption and clearing system allows a consumer to collect electronic coupons while doing online shopping, or otherwise visiting an e-commerce site, from various e-commerce sites and redeem these coupons online at any e-commerce site or physical store, satisfying the purchase conditions of the offer. The clearing between the issuing and redeeming e-commerce sites is also electronic, whether off-line or online. The issuing e-commerce site is commonly referred to as the manufacturer and the redeeming e-commerce site is referred to as the retailer.
A shopper can browse through a number of e-commerce sites and collect a large number of electronic coupons distributed via e-mails, banner advertisements on various sites, buying online, and the like. The number of electronic coupons that a shopper may have can be 10 or more, at any point of time, since the cost of issuing an electronic coupon is minimal. Electronic coupons make life easier for the shopper because the person does not have to cut, clip and carry paper coupons. However, the selection of electronic coupons to get the optimum discount is not straight forward.
The electronic, coupons may also have a plurality of discount types such as monetary, loyalty points, freebies, and the like. The task of deciding the optimal subset of coupons, along various optimization parameters such as number of points awarded, freebies offered, discount amount and expiry date, subject to mutual exclusivity constraints is a hard problem for the shopper. This problem is referred to as the “electronic coupon decision problem”.
U.S. Pat. No. 5,845,259, issued to West et al. on Dec. 1, 1998, describes an electronic coupon dispensing system to increase the rate of coupon redemption. The system includes a memory for electronically storing a plurality of coupons, one or more user interfaces for permitting selection of any of the coupons from a coupon menu, and one or more printers for printing coupons elected at the user interface. The system provides an in-store coupon dispensing system that dispenses coupons based on consumer-made coupon menu selections. The system is said to generate coupons with any expiration date, e.g., daily, weekly, or monthly, based upon each advertiser's specific marketing needs. In addition, the coupon dispensing machine may limit the number of coupons dispensed, based upon an initial number or consumer demand, as set by the advertiser. Also, coupons can be disseminated to any level, e.g., by geographic region, city, chain, store, or any defined set of stores within one or more geographic region, city or chain.
This system is said to permit a store to suspend dispensing of a particular coupon or coupons based on inventory status or other individual store conditions. Further, the system is said to permit a store to respond quickly to ever-changing consumer buying trends, in that a coupon for a particular product or products may be added to, deleted, or temporarily suspended from the system menu through software-implemented changes on a same-day basis. However, this system disadvantageously generates coupons based on a shopper's selection and an advertiser's preferences. A shopper is not allowed to choose among the shopper's existing coupons. Further, the system disadvantageously does not provide any intelligent product recommendations that allow a shopper to use more coupons. Also, the system is limited to physical stores and printed coupons.
Existing systems do not assist a shopper in a simple selection of electronic coupons for use in an online or an off-line purchase. Further, such systems fail to provide intelligent suggestions and automated, near-optimal or optimal combination computations along shopper specified optimization parameters.
Thus, using conventional approaches, a shopper often experiences difficulty in determining what additional coupons can be used by the purchase of another product(s). Nonetheless, the purchase of one more product may likely satisfy the conditions of a coupon that gives a huge discount to the shopper, however, the shopper may not be able to determine this. Thus, a need clearly exists for an improved system for facilitating the use of combinations of electronic coupons.